Rate Increase History for Medigap Plans

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Russell Noga
by Russell Noga | Updated January 10th, 2024

Understanding the Rate Increase History for Medigap PlansMedigap plans are supplemental insurance policies for beneficiaries enrolled in Original Medicare Parts A & B. These policies require monthly premiums to remain enrolled.

If you don’t pay your monthly premiums, the insurer may cancel your plan, leaving you uninsured.

Medigap plans are available from private healthcare companies, and each provider charges different premium rates for their policies.

When assessing you for your premium, the provider uses your gender, age, smoking status, and location in the United States to set your rate.

Your premiums increase annually, depending on factors influencing your risk profile and the Medigap provider’s internal pricing policies.

This post gives you information on understanding the rate increase history for Medigap plans and how providers increase your Premiums.


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Understanding Medigap Benefits & Coverage

The CMS is a federal agency responsible for regulating the Medicare and Medicaid industries. CMS ensures all Medigap providers offer the same standardized benefits in plans relating to Medicare Part A & B expenses.

All Medigap plans offer the following benefits.


Understanding Medigap Benefits & Coverage


  • Part A coinsurance and hospital costs for up to 365 days after using Medicare benefits.
  • Part A hospice care coinsurance or copayment.
  • Part B coinsurance or copayment.
  • Blood transfusion costs for the first three pints of blood.

Plans F*, G, and N offer additional Medicare Parts A & B benefits.



Understanding Medigap Benefits & Coverage - Plan F, G, and N


  • Part A deductible.
  • Part B excess charges (Plan N doesn’t cover these charges).
  • Skilled nursing facility care coinsurance.
  • 80% of emergency healthcare costs when traveling outside the US for 60 days. ($250 deductible and $50,000 maximum apply).
  • Unlimited coverage for all out-of-pocket costs.

*Plan F is the only Medigap policy covering the Part B deductible. However, the CMS is phasing it out, and unavailable to beneficiaries qualifying for Medicare Parts A & B after January 1, 2020.

You might still qualify for Plan F if you’re eligible for Medicare before this date and not enrolled in a Medigap plan.

However, Medigap providers might require you to undergo medical underwriting before offering you Plan F.

If you have a guaranteed issue right, you can avoid medical underwiring when signing up for Plan F.

Call our team to get more information on your situation and whether you qualify for guaranteed issue rights when enrolling in Plan F.

What Factors Affect Increases in Medigap Premiums?

As mentioned, Medigap providers use your age, gender, smoking status, and location to determine your risk profile and what they charge in monthly premiums.

Women will pay lower premiums than men because men present a higher insurance risk. For instance, rates of heart attack and diabetes are more prevalent in men than in women.

Smokers are more expensive to insure than nonsmokers because they tend to be at a higher risk for developing chronic health conditions as they age. The older you are, the more at-risk you are of developing health disorders that increase your risk profile with insurers.

Age is a significant factor in increases in Medigap premiums. Health insurers use one of three models when assessing your age for premiums.


What Factors Affect Increases in Medigap Premiums


  • Attained age-rated – The premium is based on your age when applying for a Medigap plan. The rate increases as you get older. These premiums often start lower but get more costly as you age.


  • Issue age-rated – The insurers base your premium on your age at the date of application. The younger you are, the lower the premium. This premium remains constant and doesn’t increase as you age.


  • Community-rated – Regardless of age, all policyholders receive the same monthly premium.


If the insurer uses an attained age model, your premiums will increase as you age. So, it’s important to ask the insurer or agent about the insurer’s age rating model when applying for a Medigap plan.

Other factors causing increases in Medigap premiums include inflation and your claims history.

If you make frequent claims on your policy, the insurer will increase your premiums to compensate for the risk of insuring you.

Economic factors like inflation increase the Medigap provider’s costs as do health claims each year.

For instance, age inflation means they must pay their employees more, and they transfer these costs to beneficiaries by increasing monthly premiums.

Additionally, Medicare increases the Medicare Part A & B deductibles from time to time. Since Medigap plans cover these costs, they’ll transfer the increase to the beneficiary through higher premiums.

Annual Trends in Medigap Premium Growth

Annual Trends in Medigap Premium GrowthDepending on the plan state the beneficiary resides in, Medigap premiums typically increase at a rate of 5% to 8% annually. Depending on your plan and the provider you use, you could see annual increases at the start of the year, in your birthday month, or on both occasions.

Occasionally, Medigap premiums would stay flat year-on-year with no changes. However, the increase in annual inflation rates since 2021 means you can expect higher premiums to compensate for the additional costs your Medigap provider incurs for running their scheme.

Some of the trends in premium increases are as follows.


  • Increases in Medicare spending per capita at the state level led to increased Medigap premiums.
  • Individual and older Medigap policies are more expensive than group and new policies.
  • Medigap policies with fewer covered lines are more expensive.
  • Medigap policies with the largest number of covered lives have smaller increases in premiums.
  • Premiums for issue-age-rated plans are typically lower than attained-age-rated plans.


The data show Medigap premiums experienced moderate increases over the last two decades. In most instances, increases in premiums are lower than the average increase in Medicare spending per capita.

However, there are large variations across plan types and states for Medigap premiums. So, increases depend on Medicare spending per capita and differences in beneficiary risk profiles.



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When Do Medigap Premiums Increase?

When Do Medigap Premiums Increase
Medigap premiums see significant increases when the plans lack availability, such as in the case of Plans F & C, and inflation and medical costs increase rapidly.

Medigap premiums see significant increases when the plans lack availability, such as in the case of Plans F & C. These policies were discontinued for new beneficiaries to Medicare after January 1, 2020. Premiums will also see a faster rate of increase when inflation and medical costs increase rapidly, as is the case for 2020 and 2023, where inflation peaked at highs not seen since the 1970s.

For instance, while the average increase for Medigap premiums in the last decade was between 5% to 8%, some plans saw a 12% or greater increase due to rising company costs and loss ratios in 2022. The loss ratio indicates the percentage of health benefits paid compared to what the insurer collects in monthly premiums.


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Frequently Asked Questions

What is the Rate Increase History for Medigap Plans?

The Rate Increase History for Medigap Plans refers to the historical pattern of premium changes for Medicare Supplement insurance policies over the years.


Who is eligible for Medigap Plans?

To be eligible for Medigap Plans, you need to be enrolled in Medicare Part A and Part B. Generally, you must be 65 or older, but some states might offer these plans to individuals under 65 with certain disabilities.


When can I enroll in Medigap Plans?

You can enroll in Medigap Plans during your Medigap Open Enrollment Period, which begins when you’re 65 and enrolled in Medicare Part B. This period lasts for six months and ensures you have guaranteed issue rights, meaning insurers can’t deny you coverage or charge you higher premiums due to your health.


What factors contribute to rate increases in Medigap Plans?

Several factors contribute to rate increases in Medigap Plans. These include medical inflation, rising healthcare costs, the age of policyholders, location, plan type, and changes in benefits offered.


Are all Medigap plans subject to rate increases?

Yes, like all insurance policies, Medigap Plans can experience rate increases. However, the rate increase history can vary among different plans and insurance companies.


How can I anticipate rate increases in Medigap Plans?

While you can’t predict exact rate increases, it’s helpful to research the rate increase history of the specific Medigap plans you’re interested in. This history provides insights into how premiums have changed in the past.


Can I switch to a different Medigap plan to avoid rate increases?

Yes, you can switch to a different Medigap plan to potentially avoid substantial rate increases. However, if you switch outside your Medigap Open Enrollment Period, you may need to undergo medical underwriting, which could impact your eligibility and premiums.


What are the best ways to manage rate increases in Medigap Plans?

To manage rate increases, consider shopping around for different Medigap plans and comparing rates from various insurance companies. Additionally, staying healthy and avoiding tobacco can help keep your premiums lower.


How does the rate increase history differ between Plan G and Plan N?

The rate increase history can differ between Plan G and Plan N. Plan G typically has more stable rates because it offers comprehensive coverage, including coverage for the Part B deductible, which can lead to fewer rate adjustments.


Is it possible to lock in a certain rate for Medigap Plans?

While you can’t lock in a specific rate for the entire duration of your Medigap policy, choosing a plan with a stable rate increase history, especially during the initial years, can help you avoid sudden and significant premium hikes.


Call Our Team for the Best Rates on Medigap Premiums

Reach out to our team at 1-888-891-0229 for a free consultation and professional advice on Medigap policies and rates. We’ll source you the best Medigap plan from providers in your state at the lowest premiums.

If you can’t call us right now, leave your contact details, and we’ll have a fully licensed Medigap agent get back to you. Or you can use the automated tool on our website to get a free quote on any Medigap plan.

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